Transatlantic economic ties between the United States and Europe – two interviews

Clearing the path to free-trade in the Atlantic

The opportunities for a transatlantic free-trade agreement between the United States and the European Union are more possible than ever after the reelection of American President Barack Obama. EU Trade Commissioner Karel de Gucht expects the talks for such an agreement to be taken up within this year. The United States is the European Union’s most important trade partner. Regardless of Obama having declared this to be the Pacific Era, Gucht’s US colleague , U.S. Trade Representative Ron Kirk, leaves nothing to doubt about how important the investing relationship is to Europe. Both international trade politicians, who lead the EU-US High-Level Working Group on Jobs and Growth, agree on one thing: There is a lot of potential lurking in transatlantic trade.

ITN: “Four more years in power – what does the reelection of Barack Obama as US President mean for the economic relationship between Europe and the USA?”

Karel De Gucht: “Immediately after the election results were known, I congratulated my counterparts on President Obama’s reelection. Personally, I look forward to working with his future administration to strengthen further the transatlantic trade and investment relationship just as we have been doing over the past four years. We are each other’s most important trading partners. No other economic relationship in the world is as integrated as the transatlantic economy, which is unrivalled in scope and intensity. The creation of growth and jobs remains a priority for both the US and the EU, and I look forward to working closely with President Obama's administration to unlock the unparalleled potential of the transatlantic market.”

EU Trade Commissioner Karel de Gucht hopes for a green light to talks to happen soon.

ITN: “The US economy only came out of the recession recently, and the euro crisis is still continuing. What are the necessary steps to strengthen and to improve the economic ties?”

Karel De Gucht: “There is no beating around the bush: Our economies have seen better times. However, I am one of those who believe that something positive can be born out of a crisis. If there is sufficient political will and engagement, we can take bold steps to strengthen our economic ties. To this end, both the EU and the US have been working intensely over the year 2012 in the High Level Working Group for Growth and Jobs to identify the ways and means to take our relationship to the next level. I am confident that – together with the US – we can release that potential by proposing a road map for future negotiations that can improve each other’s market access and cut away red tape, making it easier for companies on both sides of the Atlantic to do business. Together with the United States Trade Representative, I look forward to providing this final report on the High Level Working for Jobs and Growth. I am confident this will allow President Obama, along with Presidents Van Rompuy and Barroso, to provide a green light to launch actual negotiations towards a transatlantic trade agreement.”

ITN: “What role does the Transatlantic Economic Council play?”

Karel De Gucht: “The TEC was set up in 2007 and has played a tremendous role in bringing together both sides of the Atlantic in the areas of regulatory convergence. It is a ‘living’ institution, which carries out its work on a continuous basis between the ministeriallevel meetings. TEC has a promising and ambitious agenda, in particular when it comes to future growth markets and emerging sectors. We have made significant strides towards technical convergence in the fields of electronic vehicles and are working on future-oriented areas such as e-health, raw materials, nanotechnology or cloud computing, for instance. And when looking back at the last couple of years, we managed to agree on joint ICT or investment principles that we are promoting together with respect to other trading partners and/or in international organisations. We have also recognized our ‘secure trader’ programmes facilitating border and customs clearance of goods, to name only a few concrete successes. These results have contributed to building up trust between the EU and US administrations and have enhanced stakeholders’ participation in the TEC work that, in some instances, have started owning the process. Should negotiations for a comprehensive trade and investment agreement be launched, work in the TEC will continue, and it is expected to be instrumental in our efforts to strengthen regulatory convergence across the board, as part of an agreement.”

ITN: “Why do you advocate the idea of a transatlantic free-trade agreement?”

Karel De Gucht: “The case for an agreement is clear-cut: Both in the EU and the US we are aiming at creating jobs and growth. A comprehensive agreement would unleash a huge potential of our markets. Such an agreement would facilitate further what we are both good at: producing high quality goods and services, and trading them. In times of economic downturn, I do not see any reason to be skeptical: Increasing trade is an ‘easy’ way towards growth. It does not imply any hard budgetary or political choices. It is an obvious contribution to a shared objective.”

ITN: “Mr. De Gucht, thank you for your time!”

Marry in haste, repent in leisure: U.S. Trade Representative Ron Kirk wants to explore the feasibility of a transatlantic free-trade agreement carefully.

ITN: “Mr. Kirk, what does the reelection of Barack Obama as US President mean for the economic relationship between Europe and the USA?”

Ron Kirk: “Tapping the full potential of the extraordinary economic relationship between the United States and EU to boost our growth and support more and better jobs remains a high priority for the Obama Administration. There is a growing consensus on both sides of the Atlantic that we can – and we should – do more to tap that potential and to help meet the competitive challenges of the coming decades. It was this recognition that prompted President Obama and European Presidents Barroso and Van Rompuy to create the US-EU High Level Working Group on Jobs and Growth in November 2011. They tasked Commissioner Karel De Gucht and myself to examine, with an unprecedented degree of rigor and cooperation, all of the available options for increasing our economic growth, jobs and international competitiveness – and that work is ongoing.”

ITN: “How can the transatlantic economic ties be strengthened and improved?”

Ron Kirk: “The United States and the EU already have the world’s largest trade and investment relationship. Each day, goods and services worth around 2.7 billion USD are traded bilaterally, supporting economic growth and millions of jobs in our economies. Direct US and EU investment in each other’s economy exceeds three trillion USD in value. Policymakers and private sector stakeholders in the United States and the EU agree, however, that we have not yet fully tapped the potential of bilateral trade and investment to promote growth, jobs and competitiveness in our economies. Our tariffs and other conventional barriers to imports are quite low, by global standards, but there are significant restrictions in certain sectors that still inhibit trade. The EU and we also agree that so-called ‘behind the border’ or non-tariff barriers prevent a substantial amount of trade in goods and services.”

ITN: “What role does the Transatlantic Economic Council play?”

Ron Kirk: “The Transatlantic Economic Council, or TEC, which started in 2007, continues to be a key vehicle, along with the High Level Regulatory Cooperation Forum, to promote transatlantic cooperation that will make the US and EU economies more innovative and able to compete globally. The TEC has a mandate to foster closer regulatory cooperation, share best practices and develop joint policy principles in the areas of the greatest benefit to businesses and consumers, especially in emerging technologies and sectors. The TEC has done valuable work since it last met in November 2012, and we foresee the TEC continuing its important work whatever the High Level Working Group may recommend.”

ITN: “The European Union advocates the idea of a transatlantic free-trade agreement with the USA. Would this be a viable option in the long-term perspective?”

Ron Kirk: “In its June Interim Report in 2012, the US-EU High Level Working Group on Jobs and Growth reached the preliminary conclusion that a comprehensive agreement that addresses a broad range of bilateral trade and investment policies as well as issues of common concern with respect to third countries would, if achievable, provide the most significant benefit of the various options we have considered.’ This key Working Group conclusion from June underscored the shared US and EU perspective that a comprehensive trade agreement could, in principle, yield significant benefits, but also that further work needed to be done to assess whether such an agreement would be ‘achievable’– or ‘viable,’ as your question puts it. The Working Group continues to assess the prospects for the successful resolution of issues that could be particularly challenging in a potential negotiation. Our goal is to ensure that any initiative we pursue offers a meaningful boost to transatlantic trade and investment over a reasonable period of time.”

ITN: “Mr. Kirk, thank you for your time!”

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